Tag Archives: contingency planning

Ideas to Improve Your Financial Health in 2022

A new year. New resolutions. Here are five ideas to consider to help improve your financial health in the upcoming year.

  1. Save more for retirement. Plan for the future by feathering your retirement nest egg. For instance, you can contribute up to $20,500 to a 401(k) account in 2022, plus another $6,500 if you’re age 50 or older. Plus, your company may provide matching contributions up to a stated percentage of compensation. And you can supplement this account with contributions to IRAs and/or other qualified plans.
  2. Update your estate plan. Now is a good time to review your will and make any necessary adjustments. For example, your will may need to be updated due to births, deaths, marriages or divorces in the family or other changes in your personal circumstances. Also review trust documents, powers of attorney (POAs) and healthcare directives or create new ones to facilitate your estate plan.
  3. Rebalance your portfolio. Due to the volatility of equity markets, it’s easy for a portfolio to lose balance against your investment objectives. To bring things back to where you want, review your investments periodically and reallocate funds to reflect your main objectives, risk tolerance, and other personal preferences. This will put you in a better position to handle the ups and downs of the markets.
  4. Review, consolidate, and lower debt levels. One sure-fire method for improving your financial health is to spend less and save more. Start by chipping away at any existing debts. This may mean giving up some luxuries, but it’s generally well worth it in the long run. Pay extra attention to debts with high interest charges like credit card debt. If possible, consider consolidating several of these debts into one or two obligations if you can lower your interest rate in the process.
  5. Contingency planning. No one can foresee every twist and turn that 2022 will take. To avoid potential financial hardship, look to improve your emergency fund by setting aside enough funds to pay for six months or more of your expenses in case of events like a job loss or a severe health issue.

These five tips can help you thrive in 2022!

Moving From “Paycheck to Paycheck” to “Planning Ahead”

A recent study found that 47% of American workers live “paycheck to paycheck”. The path to achieving financial milestones like paying for a college education, buying a car, owning a home or retiring at an early age always begins with one step – saving for the future. Based on this survey, many Americans aren’t saving – and are unprepared for the unexpected.

The survey also found that:

  • More than half knew that an emergency fund should hold six months of living expenses
  • However, two-thirds don’t have that amount in savings
  • How many don’t have any emergency fund at all? 30%!
  • Retirement planning – more than half don’t contribute to a 401K, IRA or other retirement plan
  • Two-thirds of baby boomers carry their credit card debit into retirement

Start small and start NOW. Begin with a small goal – put away $10 each week. As that reserve grows, focus on building an emergency fund with three to six months of living expenses. The unexpected can and will happen to all of us – will you be prepared?

Disaster-Proof Your Financial Information

Planning for a natural disaster requires more than just making sure you have an escape route and a case of bottled water.  You need to realize the potential financial consequences of such events.  Here are few smart steps we recommend.

Make electronic backups of important records including:

  • Insurance policies
  • Tax returns
  • Bank and credit card account information
  • Vital records – medical, identification, etc.
  • Pictures and/or videos of your home and/or business

It is critical that you store this backup in a separate location that will be easy to access if your area suffers damage.

If you own a business, develop a contingency plan to get your business up and running after a disaster including steps so that your employees can work from home or elsewhere. Both businesses and families should consider how to maintain contact in an emergency – via phone trees or other methods – and these contingency plans should be reviewed every year to make sure they are up-to-date.